Medicare Advantage Home Care Proposal Excites Providers, Payers

The Centers for Medicare & Medicaid Services (CMS) recently proposed adding non-skilled in-home care as a supplemental benefit to Medicare Advantage plans in 2019.

The language of the proposal led to questions, still unanswered, about which specific services could be covered under MA plans. However, home care providers and insurance companies are interpreting the new proposal as good news.

Expanding benefits

Although the language in the proposal was vague in regards to specific services, CMS’ move is being hailed by major home health care providers such as Baton Rouge, Louisiana-based Amedisys (Nasdaq: AMED).

“It’s a very good sign for Amedisys and the patients that we care for,” Mike Trigilio, president of the company’s growing personal care business, told Home Health Care News. “We don’t know a lot of the details today, but as a leading indicator, it is great [news].”

One specific facet of the proposal—an expansion of benefit flexibility—is reason for excitement, according to Eve Gelb, senior vice president of healthcare services for SCAN, one of the nation’s largest non-profit Medicare Advantage plans. SCAN has more than 187,000 members in California.

The changes could enable SCAN to offer benefits based more on needs of individuals rather than uniformly across a patient population—which could help contain the costs of adding these additional benefits.

“As an organization that cares for lots of frail and medically complex individuals, we’ve always struggled with a benefit uniformity,” Gelb told HHCN. “General advances on flexibility with how benefits are administered is a big win.”

The additional supplemental benefits are also a big win, she said, noting that SCAN has already been offering personal care services to its dual eligible patients—those that qualify for Medicare as well as Medicaid. But opening up all Medicare Advantage plans to non-skilled in-home care could take some time, as the organization wants to ensure the benefits are affordable and will last.

When SCAN first began as a demonstration program 35 years ago, it offered non-skilled home care for all its beneficiaries, according to Geld.

“That demonstration was the longest running in Medicare, and it wound down in 2003,” Gelb said. “So, we had to take those services away from our beneficiaries who were Medicare eligible, and those services really do enable individuals to stay living in the community, which we believe is better for Medicare.”

To ensure that beneficiaries would be able to keep new in-home care benefits, SCAN will evaluate the cost of additional benefits and go through the bid process.

SCAN isn’t the only Medicare Advantage provider looking forward to the changes. Louisville-based Humana (NYSE: HUM), which operates its own home care business and recently moved to acquired the home care operations of Kindred Healthcare (NYSE: KND), also sees more opportunity. Humana is one of the nation’s largest for-profit Medicare Advantage payers.

“Humana’s experience and the research literature clearly demonstrate that health is influenced by more than just medical-specific factors,” Humana told HHCN. “Indeed, social determinants of health (SDOH), such as food security, housing, transportation and social interaction, play a role in the overall health of the seniors we serve. Humana is encouraged that CMS is considering flexibilities in the rules that will allow Medicare Advantage plans to better target these needs.”

Seeking deals

Some private duty providers, such as California-based 24Hr HomeCare, have already dipped their toes into alternative payment models in Medicare, and see this MA proposal as a related opportunity.

24Hr HomeCare offers non-medical home care in California, Arizona and Texas, and has managed to secure pilot contracts with a number of health systems as a private duty, non-risk bearing partner in certain models, such as bundled payments. The relationships that the company has forged in these arrangements should help it win Medicare Advantage, according to Regional Director of Strategy and Partnerships Gavin Ward.

“I had a big grin on my face,” Ward told HHCN, referring to when he learned of the announcement from CMS. “We have been saying in the next two years we think Medicare will pay for home care. This is more of a direct statement from [CMS] that they are going to pay through Medicare Advantage.”

24Hr HomeCare’s business is 80% private pay, while about 20% of revenue comes from other funding sources, including the Department of Veterans Affairs (VA) and local grants. As the proposal for non-skilled in-home care moves forward within MA plans, the company will seek to become a provider with MA payors.

“Because our industry is franchised and a lot of mom-and-pop organizations, I think it’s difficult for smaller home care organizations to have the bandwidth to have research and development to go after that business,” he said. “They’re just sustaining their normal business. I would say the majority of companies may not be ready to take this on, but those that have already participated in at-risk relationships…we’ve been able to go through the proposal process and put some skin in the game ourselves.”

It will take some time before a finalized proposal moves forward, including a comment period before CMS can issue a final proposal. 24Hr Home Care is not sitting on its hands in the meantime.

“Now is the time to strike, while the iron is hot,” Ward said. “Get those meetings to get the designs submitted—that will be our effort in California, Arizona and Texas.”

Home care advantages

For a company like Amedisys, which is one of the nation’s largest home health care providers, with 432 care centers in 34 states, the expansion of benefits in MA could be a big boon down the line.

Not only has Amedisys been ramping up its personal care services division, becoming the largest provider in Massachusetts in the last two years, the company has also upped its exposure to Medicare Advantage.

Approximately 75% of the company’s business is within traditional fee-for-service Medicare, with another 25% in non-fee-for-service, including Medicaid, charity care and Medicare Advantage. The overlap leaves Amedisys ready to take on new MA contracts, while providers without a personal care and home health business won’t have the same advantage, according to Amedisys CEO Paul Kusserow, who formerly was an executive at Humana.

“There are basically three companies that play in this space—us, Kindred and Almost Family,” Kusserow said of the personal care overlap in home health. “There are some smaller, private players. I think of the publicly traded companies, if Almost Family combines with LHC Group everybody has a play in it. I think it’s going to be very additive particularly as MA penetration continues to grow.”

Seeing non-skilled in-home care being added to MA may be a sign of things to come, as other benefits have also been floated to integrate into MA.

Specifically, hospice care and palliative care are being looked at as supplemental benefits down the road, Gelb said.

See CMS’ full announcement here.

Written by Amy Baxter